Stocks Close At Record Highs Ahead Of Big Week Of Earnings

Key Takeaways

• Dow Leads Gains As S&P Hits Record High Close
• Crypto Regulation And National Stockpile Plans Spark Market Attention
• Upcoming Earnings And Inflation Data Key For Market Direction

Stocks traded higher on Thursday with the biggest gains coming in the Dow Jones Industrial Average, which added 0.9%. That was followed by the S&P 500, up 0.5%, setting a new record high close. The Russell 2000 was higher by 0.4% and the Nasdaq Composite was up 0.2%.

As earnings season gets underway, we're still a few days away from the biggest names. However, there are some companies that have reported worth mentioning. Overnight, Texas Instruments reported an earnings beat, but offered a disappointing outlook sending that stock lower by 4.5% in premarket trading. American Express also beat on earnings. In addition, the company raised its dividend by 17% to $0.82. Despite the good news, shares are lower by around 3.5% premarket. Lastly, Boeing offered an early look at their earnings and the company said it expects to take a $4 billion loss. Thoe shares are down just over 1%.

Much of this week’s news has centered around the new administration getting settled in Washington as new policies and initiatives are unveiled. One of the more watched items has centered around crypto policies and how the administration would like to see crypto regulated. To that end, President Donald Trump signed an executive order directing his administration to investigate creation of a national digital asset stockpile. Since December, Bitcoin has traded in a roughly $30,000 dollar range and it will be interesting to see how prices respond as more details about this unfold.

At the same time a national stockpile is being explored, Trump has also pushed Saudi Arabia to lower oil prices and called for lower interest rates. His ability to influence both those initiatives remains to be seen; however, we have seen the U.S. dollar pull back some and gold prices move higher. I'm not sure how this will ultimately play out, but for options traders, volatility in gold is elevated, making it a potentially interesting trade. On a somewhat related note, the Bank of Japan raised its interest rates by a quarter-point which is the highest level Japan has seen in 17 years. If you recall, it was the rise in rates that caused markets turmoil back in August as the Yen-carry trade quickly unwound.

Looking ahead to next week, it will be filled with both earnings and economic data. Some of the notable names scheduled to report next week include Apple, Meta and Tesla. On the economic front, we have a Federal Reserve Open Market Committee meeting scheduled for Wednesday, where rates are expected to be left unchanged. Then on Friday, we’ll get the latest report on inflation when the Personal Consumption Expenditures data is released.

For Friday, I’m keeping an eye on bonds. Despite the president calling for lower interest rates, we’re continuing to see rates hold their elevated levels. As mentioned above, I’m watching gold prices which are up 1% in premarket. Finally, I’m closely watching Bitcoin and digital assets overall. The unique nature of these products and the fact they trade 24 hours, seven days a week means it’s possible these products can move over weekends. We’ll see if Bitcoin can break out from its current range and if that can take other assets higher as well. As always, I would stick with your investing plan and long-term objectives.

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